MONTPELIER — A lengthy delay in completing construction on a revamped state office building in Bennington cost Vermont an additional $300,000, according to state officials, who are negotiating with the contractor in an attempt to recoup some of the money.

The dispute is the latest hurdle in a protracted series of events set in motion seven years ago when five state employees said the previous office complex, which was partly torn down and rehabilitated, had made them sick with a rare disease.

Williston-based DEW Construction Corp. won the $12.4 million contract to construct the building in Bennington that hosts various state agencies and the Bennington County criminal court. Although the state made another payment to DEW this month, about $150,000 is still owed under the contract.

State officials believe the remaining balance should not be paid because of the delay.

“Currently there is some dispute about our payment and the amount owed to them,” said Emily Montgomery, a legal and policy adviser for the Department of Buildings and General Services. “We have not made full payment under the contract.”

Peter Hack, the project manager for BGS, said talks are ongoing and include BGS Commissioner Michael Obuchowski and DEW owner Don Wells along with lawyers on both sides.

“We both have our sides to the story and to the discrepancy,” Hack said.

The talks have been amicable and somewhat informal. In fact, DEW has secured new contracts with the state since the issue emerged.

“I hate to use the word ‘negotiations.’ I don’t know if that really describes the process here,” Hack said. “Nobody’s taking anybody to court. There’s no threats or anything like that. If it was black and white it would be done by now. That’s not the case.”

Wells declined to discuss the issue yet.

“Until we settle it, which I think is going to happen any day now, I’m not going to discuss it,” he said. “I think everybody is working in good faith and everything will be resolved in the very near future. I have no reason to believe otherwise.”

State employees moved into the new Bennington building in late April 2012, before a certificate of completion was issued. Typically the architect of a project will provide the certificate after inspecting the building and verifying that all systems are functional.

“Right after that we found that there were several things that were not really done that were supposed to be done. So it’s a matter of what do you call ‘finished,’” Hack said. “It’s a funny expression, but we say, ‘Are you done done?’”

The state contends that DEW was not entirely done with the project even though employees moved in and began serving the public. Gov. Peter Shumlin and local lawmakers would hold an event just weeks later to formally open the building.

“We moved in without that document just because it was kind of a crazy time, but right after we moved in we realized there were several deficiencies that made us believe that we were not ready to move in,” Hack said.

Neither the employees nor the public was affected by the unfinished state of the building, according to Hack. There was nothing that laymen could see or know, he said, “but the design team knew.”

Chief among the issues were faulty mechanical systems, namely the heating and cooling system. Several entities, including DEW, the state and subcontractors, were involved in addressing the malfunctions, Hack said.

It took about 10 months “to finally get through it all until we were satisfied,” Hack said. Keeping the architecture team and others on site during that time raised the final cost of the project.

“It took a very, very, very long time to get these loose ends wrapped up,” Hack added. “That’s where our concern is, I guess, and our basis for maybe they might owe us some money for the delay.”

State officials have determined the delay resulted in about $300,000 in additional costs. The state has already given some ground on that number, Hack said.

“We never hold the contractor or anybody else 110 percent responsible for everything,” Hack said. “We’re good guys. It was a tough job, a very difficult job. There were all kinds of things that came up during construction.”

The two sides have traded offers, he said.

In February 2007, then-Gov. James Douglas ordered a “phased shutdown” of the original office complex in Bennington. About 135 employees were moved out of the building and into temporary locations while more long-term modular office space was being erected on the site for use during the main phase of construction on the new facility.

Douglas’ decision came after five employees had reported in July 2006 that they had been diagnosed with sarcoidosis, a disease of unknown origin that can affect multiple organs in the human body. They said the illness was caused by the old building.

Six current and former employees at the time were eventually diagnosed with the disease, which typically affects about 1 in 10,000 people. The Vermont State Employees Association launched a public campaign urging Douglas to close the building.

The state first contracted for an in-depth environmental assessment of the former state office building, which found that boiler soot had been circulating through the building by way of the heating and cooling system. Still, no official cause of the worker illnesses was ever determined.

The state then moved forward with replacing the building. The project included demolition and reconstruction of an older section built in 1978. A new section built in 1992 was gutted and the entire inside was rebuilt.